NSW Police Force v Newby
[2009] NSWWCCPD 75
•7 July 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | NSW Police Force v Newby [2009] NSWWCCPD 75 | |||||
| APPELLANT: | NSW Police Force | |||||
| RESPONDENT: | Jason Newby | |||||
| INSURER: | Allianz Workers Compensation (NSW) Ltd-Treasury Managed Funds | |||||
| FILE NUMBER: | A1-8532/08 | |||||
| ARBITRATOR: | Mr R Foggo | |||||
| DATE OF ARBITRATOR’S DECISION: | 24 February 2009 | |||||
| DATE OF APPEAL DECISION: | 7 July 2009 | |||||
| SUBJECT MATTER OF DECISION: | Adequacy of reasons; section 40 of the Workers Compensation Act 1987, ability to earn. | |||||
| PRESIDENTIAL MEMBER: | President, His Hon. Judge Keating | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | DLA Phillips Fox | ||||
| Respondent: | Harris Wheeler Lawyers | |||||
| ORDERS MADE ON APPEAL: | 1. The decision of the Arbitrator dated 24 February 2009 is revoked. The matter is remitted to a new arbitrator for determination of the worker’s ability to earn in suitable employment in accordance with the reasons given in this decision. | |||||
| 2. The costs of the first arbitration and of the second arbitration are to follow the orders at the second arbitration. | ||||||
| 3. Each party pay his or its own costs of the appeal. | ||||||
INTRODUCTION
The New South Wales Police Force (‘ the Police Force’) filed an ‘Application to Appeal Against Decision of Arbitrator’ (‘the Application’) on 23 March 2009. The respondent to the appeal, Mr Newby, filed a ‘Notice of Opposition to Appeal Against Decision of Arbitrator’ on 27 April 2009.
The Police Force appeals the Arbitrator’s determination of Mr Newby’s ability to earn in suitable employment, self employed mowing lawns because there was no factual basis for the conclusion reached, his reasons were inadequate and the decision was speculative and unsubstantiated. In the appeal proceedings the Police Force seeks to admit and rely on new evidence purporting to establish the correct earnings of a ‘Jim’s Mowing’ franchisee.
BACKGROUND
Mr Newby left school after completing year 10 and completed a 4½-year apprenticeship at Tubemakers. He joined the Police Force commencing at the New South Wales Police Academy in Goulburn on 8 May 1988 and graduated on 29 July 1988.
After serving as a police officer at various ranks and locations he was medically discharged from the Police Force on 7 February 2008. Mr Newby suffered post-traumatic stress disorder (‘PTSD’) with major related depressive disorder as a result of the general nature and conditions of his employment including repeated exposure to numerous traumatic events.
Mr Newby made a claim for psychological injury with a deemed date of injury of May 2006. Voluntary payments of compensation were made until 23 July 2008, when, by notice given under section 54 of the Workers Compensation Act 1987 (‘the 1987 Act’), he was advised that further payments would discontinue six weeks from the date of the letter. The insurer for the Police Force alleged that he no longer suffered an incapacity for work and that he was able to earn equal to, or in excess of, the amount that he could earn in the Police Force or suitable employment.
By letter dated 22 August 2008, the Police Force gave notice under section 74 that it would make no further payments of medical expenses and disputed that Mr Newby had an entitlement to compensation under section 66 and 67 on the basis that the PTSD was in full remission and he was no longer suffering symptoms or requiring treatment.
On 23 October 2008, Mr Newby filed an ‘Application to Resolve a Dispute’ in the Commission alleging injury in the form of Post Traumatic Stress Disorder and Major Depressive Disorder as a result of the nature and conditions of employment and injury in the form of a disease of gradual process. He claimed unspecified medical expenses and weekly compensation at the rate of $743.00 per week from 4 September 2008 to date and continuing. The worker claimed four dependent children.
The claim for weekly compensation was amended at the hearing to a claim for compensation of $743.00 per week from 4 September 2008 to 30 September 2008 and from 1 October 2008 to date at $755.80 per week and continuing thereafter at the maximum statutory rate for a worker with four dependant children.
The Police Force filed a Reply on 14 November 2008, disputing that the worker had any ongoing incapacity and submitting that his ability to earn exceeded the earning of comparable employees. Further the respondent submitted that the worker was not entitled to costs because the proceeding had been brought within 12 months of previous proceeding he had commenced in the commission in respect of the same injury (matter number 8532/08)
The matter was listed for conciliation and arbitration on 2 February 2009. The parties were unable to settle the claim and the matter proceeded to arbitration hearing. The only issue for determination was the extent of Mr Newby’s incapacity from 4 September 2008 and the amount of compensation to be awarded under section 40 of the 1987 Act. No oral evidence was called. Both parties were represented by counsel, who made oral submissions on their behalf.
In a reserved decision dated 24 February 2009, the Arbitrator found in favour of Mr Newby on all issues and awarded weekly compensation at the rate of $682.00 per week from 4 September 2008 and continuing. The Police Force seeks leave to appeal this decision.
CERTIFICATE OF DETERMINATION
The Certificate of Determination dated 24 February 2009 is as follows:
“The Commission determines:
1. The Application to Resolve a Dispute is amended by adding, in Paragraph 5.1 of the Application after the words “weekly amount in dispute” the following “$743.00 gross per week from 4 September 08 to 30 September 08 and from 1st October 2008 and continuing $755.80 per week and continuing at the maximum statutory rate for a worker with four dependant children”
2. Paragraph 5.2 of the Application to Resolve a Dispute is amended by omitting the comparable earnings of $743.00 and substituting the sum of $1,442.00 and also omitting the difference of $743.00 and substituting the difference as being $1,442.00.
3. The Respondent is to pay the Applicant weekly payments of compensation at the rate of $682.00 per week from 4th September 2008 and continuing.
4. The Applicant is to provide the Insurer with WorkCover Certificates in relation to his incapacity on a monthly basis pursuant to Section 56 of the 1987 Act.
5. The Respondent is to pay the Applicant’s costs as agreed or assessed. I certify this matter as complex in accordance with Item 4 of Table 4 of Schedule 6 of the Workers Compensation Regulation 2003 and that an uplift of 15% applies to the costs of each party for the Reasons set out above.
6. This order for costs is confined to these proceedings and does not apply to the proceedings between the parties in matter no: 7127-2008.”
LEAVE TO APPEAL
Monetary threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
There is no issue that the monetary thresholds in section 352(2) are satisfied.
Time
The appeal was filed on 23 March 2009, within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
FRESH EVIDENCE
The Police Force seeks leave to admit as evidence on appeal, a statement from Mr Maunder, Divisional Manager, Jim’s Mowing dated 23 March 2009.
The relevant parts of Mr Maunder’s statement are reproduced below:
“…5.Each year, Jim’s Mowing conducts a survey of Franchisees in order to obtain feedback, and adapt business processes where necessary. The survey is a phone survey and asks about eight questions, including franchiser support, the number of training sessions attended by the franchisees and overall satisfaction.
6.In July 2008, for the first time, the survey included a question on monetary turnover of Franchisees in conducting their business.
7.Over 80% of our franchisees responded and the following averages were obtained:
Franchisee Turnover 2008
Antennas $3049
Bookkeeping $1367
Building Maintenance $1910
Car Cleaning $1212
Carpet Cleaning $1240
Cleaning $1550
Computers $2162
Dog Wash $1433
Fencing $4141
Mowing $1618
Painting $2743
Paving $6831
Pergolas $3500
Pool Care $2034
Skip Bins $963
Test & Tag $1688
Trees $2870Mowing has an average turnover of $1681 gross per week. This in a National average, with the NSW average being higher at $1839 gross per week. Average expenses for a Jim’s Mowing franchisee range from 25-35% (25% for a well established franchisee, 35% for a new franchisee).”
Included in the statement, but not reproduced, is a schedule that purports to represent the results of a survey of the weekly turnover of 44 de-identified franchisees of ‘Jim’s mowing’ showing turnovers of between $1,500.00 and $6,000.00 per week, rounded to the nearest $100).
Appellant’s submissions in support of the admission of additional evidence
The Police Force submit that:
(1) Mr Maunder’s statement could not have been obtained prior to the arbitration hearing on 2 February 2009. The first indication from Mr Newby that work in the nature of “Jim’s Mowing” represented suitable employment was at the arbitration on 2 February 2009;
(2) the Police Force made attempts to address Mr Newby’s residual earning capacity by retaining EVA to prepare a vocational report and serving it in the proceedings in the Reply to the Application to Resolve a Dispute dated 14 November 2008;
(3) Mr Maunder’s background qualifications are contained in the statement;
(4) Mr Maunder’s statement is probative and credible because he is a senior employee with Jim’s Mowing, the particular company identified by Mr Newby and the Arbitrator and it goes directly to the section 40 calculation made in the matter;
(5) a different decision would have been reached by the Arbitrator if he had had regard to the statement of the kind now sought to be admitted on appeal, consistent with the reasoning in Snow Confectionary Pty Limited v Askin [2004] NSWWCCPD 56 and YG & GG v Minister for Community Services (2002) NSWCA 247;
(6) it is in the interests of justice to admit the evidence because the first time the submission made by Mr Newby’s counsel was at the arbitration and the Police Force was prevented from assessing the issue prior to that time;
(7) substantial injustice would flow from the ramifications of the Arbitrator’s decision without reference to the statement of Mr Maunder, and
(8) reliance is placed on Paramount Global Production Pty Ltd v Gorge [2008] NSWWCCPD 127 (‘Gorge’) and the judgment of Basten JA in Haider v JP Morgan Holdings (Aust) Limited t/as JP Morgan Operations Australia Limited [2007] NSWCA 157; (2007) 4 DDCR 634 (‘Haider’) where his Honour said at [44]:
“Assuming for the present purposes that the evidence was material and probative the statutory obligations and powers imposed and conferred on the tribunal suggest that the material should have been considered in order to address the substantial merits of the case. Neither the Arbitrator’s rejection, or the failure to change that ruling, nor the potential procedural fairness objection, stood in the way of that course.”
Respondent’s submissions in opposition to the admissions of additional evidence
Mr Newby opposing the introduction of any new evidence on appeal submits that:
(a)it is not unusual for a range of occupations in the general labour market to be canvassed at a hearing;
(b)the Police Force was armed with evidence at the hearing, namely, the vocational report, so it cannot be argued that it was “bereft of evidence” to deal with the question of Mr Newby’s ability to earn in suitable employment;
(c)the material sought to be admitted on appeal is neither fresh nor additional evidence. Understood in the terms of Practice Direction No.6 the evidence sought to be admitted is no more than the material obtained by the Police Force in the form of the EVA report setting out rates of pay and award wages;
(d)whilst the evidence is credible it is not probative because the proposed evidence is deficient in the following respects:
(i)average turnover figures based on raw data processed by analysing the Sydney metropolitan area cannot demonstrate relevance to the circumstances of the respondent;
(ii)it is unsatisfactory to rely upon self employment records for the purposes of analysing a proper hourly rate of remuneration for an employee;
(iii)it provides no information as to the number of hours required to be worked to obtain even the average gross weekly turnover, and
(iv)it is not relevant to the matters to be determined by the Arbitrator in accordance with the principles of section 40 and the steps directed by Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’).
(e)for the reasons set out above the fresh evidence is not likely to have necessitated a different result;
(f)the Arbitrator at [30] and [31] of his decisions properly considered section 40 and the steps required thereby, and
(g)it is not in the interests of justice to admit the statement as fresh evidence for the following reasons:
(i)the respondent is not able to adequately demonstrate the deficiencies of the evidence sought to be admitted;
(ii)the evidence is opinion evidence and is not supported by any proper factual material relevant to the circumstances of the respondent, and
(iii)the respondent would be prejudiced in not being able to challenge, contradict or in any other way deal with this fresh evidence if it were to be admitted.
Discussion and finding re: fresh evidence
Fresh evidence or additional evidence on appeal is governed by section 352(6) of the 1998 Act, Rule 16.2(4)(c) and Practice Direction No.6.
Section 352(6) is in the following terms:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
For relevant purposes it may be taken that the Police Force have complied with Rule 16.2(4)(c).
The relevant extract from Practice Direction No. 6 is as follows:
“FRESH EVIDENCE AND/OR ADDITIONAL EVIDENCE
Each application to introduce fresh evidence or additional evidence on appeal will be considered on its own facts and circumstances and in the context of the Commission’s obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (see section 354 of the 1998 Act).
In the exercise of its discretion to admit fresh evidence or further evidence on appeal the Commission will have regard to, and the parties should make submissions on, whether:
·it can be demonstrated that the evidence could not with reasonable diligence have been obtained by the party and tendered in proceedings before the Arbitrator;
·the evidence is credible;
·there is a high degree of probability that there would have been a different decision if the evidence had been admitted at the arbitration, and/or
·it is just to admit the evidence in all the circumstances of the individual case.
Parties should be aware that a review under section 352 of the 1998 Act is not a rehearing or hearing de novo. The original arbitration should not be treated as a preliminary hearing and all relevant evidence should be called at that time.”
If fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against is relied upon, parties must include:
·a schedule of the fresh or additional evidence;
·a copy of the fresh or additional evidence;
·a brief outline of the fresh or additional evidence and the reasons why it was not given in proceedings before the Arbitrator, and
·submissions on why the fresh or additional evidence should be admitted, or rejected as the case may be.
Where a party seeks leave to rely on fresh or additional evidence in relation to the decision appealed against, that party must serve a copy of the fresh or additional evidence on the other parties to the dispute when serving the Application or Notice of Opposition.”
At arbitration, counsel for Mr Newby, made the following submission (T7.35):
“That may not be the end of it. I’m certainly not saying that Mr Newby is totally incapacitated. His own doctors reflect an optimistic pessimism in that they're wary of saying that he can do things, but I think they want him to have the opportunity to try and feel that he would be most comfortable in some self-employment avenue. That, of course, still has to be looked at in terms of capacity for work, and take, for example, if Mr Newby - because there’s nothing physically wrong with Mr Newby. Say he - as an analysis, say he obtained self-employment as a Jim’s Mowing franchise person and worked 38 hours in that type of work, as a self-employed person, his return would not necessarily reflect what his market value would be, but if you said $38 - 38 hours a week by a reasonable award rate he’d still really earn $700 a week.”
The reference to employment by “Jim’s Mowing” had not been previously foreshadowed either in the pleadings or evidence until it was raised in submissions before the Arbitrator.
In support of the Application for the admission of fresh evidence on appeal, the Police Force rely inter alia on the decision of Acting Deputy President Candy in Gorge. The facts in that matter were somewhat similar to the present case where an application was made to rely on additional evidence obtained after the arbitration hearing consisting of certain clinical notes, hospital notes and certain correspondence. The Acting Deputy President considered the principles enunciated in Haider and Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 (Akins’). He concluded that the additional evidence added nothing to the substance of the evidentiary material, which was required to be considered. He also concluded that it was not necessary to permit the admission of the evidence in order to address the substantial merits of the case.
In Akins, Clarke JA, (Sheller JA and Powel JA agreeing) stated at [160] that three conditions need to be met before “fresh evidence” can be admitted:
“These are: (1) it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) the evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) the evidence must be credible.”
However in Nowlan v Marson Transport Pty Limited [2001] NSWCA 346; (2001) 53 NSWLR 116, (‘Nowlan’) Haydon JA stated at [15]:
“…even if the three tests stated in the Akins case are applicable and are not satisfied, a question remains: is it just to admit the further evidence in this case?”
In Police Force v Kearns and Anor [2008] NSWWCCPD 29 Deputy President Roche noted that in considering an application to rely on fresh evidence or further evidence on appeal the Commission must balance two competing requirements: the public interest that litigation should not continue indefinitely against the need to ensure that justice is done in all the circumstances of the case. In balancing these matter the Commission must keep in mind its statutory duty to act “according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” (section 354(3) of the 1998 Act).
An assessment under section 40 requires a finding of the average weekly amount, which the worker is earning or would be able to earn in some suitable employment as a worker from time to time after the injury.
Mr Maunder’s statement provides evidence of business income not the value of a franchisee’s labour as a worker. In my view the evidence of Mr Maunder will not enable an appropriate assessment of Mr Newby’s ability to earn as a worker.
The survey of data relied upon by Mr Maunder includes a number of franchisees with an average weekly turnover of several thousand dollars per week. I think it can be reasonably inferred from these figures that in order to derive such turnover the franchisee concerned would be required to employ other labour. On the other hand it also includes those with more modest turnover, which could be consistent with the work being performed by the franchisee alone, as was considered in Cage Developments Pty Ltd v Schubert[1983] HCA 37; (1983) 151 CLR 584. Whilst it is submitted that the additional evidence was obtained to answer a submission that Mr Newby could be employed as a ‘franchise person’ that is operating alone mowing lawns, the evidence of Mr Maunder is addressed to the earnings of franchisees over a range of different conditions, including those with staff and those without employed or contracted staff.
There is nothing in his statement to indicate the earnings of persons employed in a Jim’s Mowing franchise to undertake lawn-mowing activities. Nor is there anything in Mr Maunder’s statement that would assist in undertaking a calculation of the worth of the worker’s labour to such a business.
Had the Police Force sought to tender the statement before the Arbitrator it would not, in my view, have been admitted even taking into account the reduction of formality and technicality and the requirement to act according to equity, good conscience and the substantial merits of the case as mandated by section 354(1)-(3) of the 1998 Act.
Even though I have concluded that the additional evidence of Mr Maunder would not result in a high degree of probability that there would be a different decision if it had been admitted at the arbitration, I am required to consider whether it is just in the circumstances of this case to admit the evidence (see Atkins, Nowlan and Practise Direction No 6). The Police Force submits that “substantial injustice would flow from the ramifications of the Arbitrator’s decision without reference to the statement of Mr Maunder”, however, having made that broad submission it was not developed any further. I am not satisfied that it is in the interests of justice for the additional statement to be admitted for these reasons. First, the statement lacks probative force for the reasons I have given. Second, Mr Newby would be denied the opportunity to reply to, or test the additional evidence of his ability to earn as stated by Mr Maunder.
I therefore reject the application for the admission of fresh or additional evidence.
REVIEW
The concept of ‘review’ under section 352 of the 1998 Act was considered by the Court of Appeal in State Transit Authority of NSW v Fritzi Chemler [2007] NSWCA 249 (‘Chemler’), where, Spigelman CJ (with whom Basten JA and Bryson AJA agreed) observed at [28] and [30]:
“28.The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30.A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit …”
The nature of “review” under section 352 of the 1998 Act has most recently been considered by the NSW Court of Appeal in Sapina v Coles Myer Limited [2009] NSWCA 71. The Court was there considering an appeal from a Deputy President of this Commission who had heard an appeal from an Arbitrator in the course of which the Deputy President approached his task by examining whether or not error had been displayed in the reasoning of the Arbitrator. It was held (Allsop P and Hoeben J, Beasley JA agreeing) that this was the wrong test for the task of review of the decision under the 1998 Act.
In the joint judgment of Allsop P and Hoeben J is an extensive and detailed examination of relevant authority concerning the proper construction of the term “review” ([17]-[59]). Following discussion of the authorities it was stated (at [57] and [58]):
“57 Whilst the new regime of dealing with workers’ compensation claims must be examined in its own statutory context, it is important to appreciate that the legislature has used a phrase that had in the prior regime, a tolerably settled meaning. Section 36 of the Compensation Court Act used the phrase “review the decision”. Subsections s 352 (1) and (5) of the WIM Act make clear that the “appeal” is to be by way of review of the decision. The notion of “review of a decision” had been clearly held in the context of the former legislation and the WIM Act to be wider that an appeal strictly so-called and encompassing a reconsideration beyond correction of error. The decision under appeal is not to be ignored, but the task of the Presidential member is, as Spigelman CJ said in Chemler, “to decide whether the original decision is wrong [that is to] decide what is the true and correct view.” This requires the Presidential member to decide for himself or herself these matters. That does not mean that there must be a de novo hearing in each case. Cases such as Watson, Boston Clothing, Litynski and AGL v Samuels made plain that this was not so under s 36 and the terms of ss 3, 352 (7) and 354 make clear that no such broad ranging factual enquiry afresh is necessarily required. The terms of the WIM Act, ss 3 and 354 and the width of the powers in s 352 (7) make clear that the Presidential member has a wide choice available as to how he or she undertakes the task of deciding for himself or herself what is the true and correct decision. As Allsop P said in Cook v Midpart, error (or lack of it) by the Arbitrator will or may be relevant to the task of the Presidential member, but it does not define the task. There is, however, an important difference in the nature of the tasks of (a) coming to the view that an Arbitrator’s view was reasonable and (b) deciding for oneself that the view of the Arbitrator is the true and correct one. In a field where evaluation of injury and evidence of incapacity can lead to different views, both or all which could be reasonably held, it is important that the parties have available to them the skill and judgment of the Presidential member reaching his or her own view on the questions involved in the decision.
59 Just as error of the Arbitrator may be relevant, so might be the advantages of the Arbitrator in seeing witnesses. Nothing we have said, and none of the cases to which we have referred, necessarily requires the Presidential member to rehear the case or to recall all the witnesses. The approach of the Presidential member as to how he or she goes about reaching his or her own decision will be a matter for him or her within the confines and freedoms of s 354.”
I propose to apply these principles in the matter before me.
EVIDENCE
Mr Newby’s evidence
Mr Newby relied on a signed statement dated 29 August 2008. He detailed numerous traumatic events in which he had been involved as a police officer including attending and working at a number of murder and suicide scenes during his attachment at various police stations from 1988 to 2006. In 2006 he began having bad dreams about his experiences as a police officer, he became socially withdrawn, intolerant, anxious, and increasingly aggressive. He did not want to go to work. In May 2006 he was placed on sick leave and commenced treatment with Mr Peters, a psychologist, Dr Wade psychiatrist and Dr Lambeth, psychiatrist.
At the time of preparing the statement Mr Newby was taking Lexapro, an anti-depressant medication and “epilum”, [sic-epilim]. He had been diagnosed with Post Traumatic Stress Disorder and Major Depression. He was on “sick report” for nearly two years prior to being medically discharged from the Police Force on 7 February 2008.
The PTSD affected his life, making him socially withdrawn, depressed and paranoid about his children’s welfare. He cited it as the cause of his marriage breakdown and his inability to sustain new relationships.
Mr Newby had looked for work in the local area but had not been able to find a suitable position. Many of the jobs required qualifications he did not possess. Work in which he was qualified, such as security work, “was just doing Police work in a different uniform for private people” (statement [36]).
In response to the jobs that the respondent’s insurer identified in the section 54 notice as being suitable employment, Mr Newby denied any of the positions were suitable. He stated that he had no experience in mining work and there were no mines in the areas where he lived. The closest mine was over an hour and a half away from where he lived. He said the thought of high-pressure work and meeting deadlines caused him anxiety. In relation to real estate agent work, again Mr Newby stated that he had no experience in this type of work. The work would involve speaking to people, something he was not able to do. He noted that his social circle was very small and included mostly other ex-policemen.
Mr Newby stated that it had been 20 years since he had worked as a fitter and turner and to return to that work would require him working as an apprentice for several years. He believed that he was essentially unqualified in that work given the length of time he had been away from it.
Dr Lambeth, prepared a report dated 14 June 2006 at the request of Mr Newby’s solicitors. He confirmed the diagnosis of PTSD and Major Depression. He considered that Mr Newby was incapacitated for work as a police officer and doubted he could ever return to police work, as he was likely to decompensate if he returned to similar duties.
Mr Milic, clinical psychologist from HealthQuest, prepared a report dated 27 June 2007, addressed to the Medical Discharge Co-ordination at the Police Force. He concluded that Mr Newby was recovering from PTSD, but was not fit to return to police work or any high stress work in the foreseeable future. He was permanently unfit for his substantive position of general duties and was unfit for alternative duties within the Police Force. He concluded Mr Newby was psychologically fit for “low stress part-time work”.
Dr Wade, the treating psychiatrist prepared a number of reports dated 8 January 2008 (x2), 9 August 2008, 14 August 2008, 26 November 2008 and 17 December 2008.
Dr Wade in his report dated 8 January 2008, noted that he had been treating Mr Newby since June 2006. The doctor diagnosed work related PTSD and Major Depression. He considered that he was unfit for police work. He was critical of the delay by the Police Force in processing the medical discharge for Mr Newby, who needed to be retrained for work away from the Police. He assessed suitable employment for Mr Newby in these terms:
“…the best disposition for Mr Newby from an employment point of view will be some sort of self-employment where he is his own boss and, therefore, he is in control of the work environment; but also a form of work that does not deal with the general public, where there is no scope for confrontation or dealing with serious problems of others and this sort of employment is likely to be a long way away from tragedy.” (page 2)
In a separate report, dated 8 January 2008, Dr Wade concluded that Mr Newby was permanently and totally incapacitated for work in the Police Force, for work in a large bureaucracy and particularly in jobs involving a duty of care for the welfare of others, or jobs dealing with or confronting trauma or sadness or working with people susceptible to aggression. The doctor also expressed doubt that Mr Newby could work under a boss due to his lack of trust, hyper-vigilance and watchfulness. He also noted the functional problems of poor concentration and memory.
Dr Wade was of the opinion that Mr Newby could develop a trade or skill in jobs in the building industry where he could work as an independent contractor “something like cottage work” where he does not have to work for anyone else. The doctor stated:
“Basically it is hard to imagine any jobs on the open labour market that Mr Newby would be fit for. That is self-employment obviously is not the open labour market; it is where if he had capital and training he could then create his own job situation.” (page 2)
Dr Wade provided psychotherapy treatment and prescribed anti-depressant, anti-anxiety medication and epilim to control the depressive symptoms and some of the PTSD symptoms. Dr Wade predicted Mr Newby would continue to need treatment for a number of years.
In the report dated 27 March 2008, Dr Wade was asked to provide an opinion on whole person impairment assessment. He concluded that Mr Newby had reached maximum medical improvement. After assessing self-care and personal hygiene, socialisation, ability to travel, concentration and employability. The doctor concluded that without psychotropic medication and psychotherapy, a more realistic level of impairment was 28% or 29% WPI.
The report of Dr Wade dated 14 August 2008 was admitted into evidence subject to the exclusion, by consent of the parties, of a number of passages as identified in the Arbitrator’s reasons at [9]. Dr Wade recorded that Mr Newby was continuing to complain of the symptoms previously recorded and stated that he was not coping well with life. He also stated that he needed to move on with life and do a work trial and suggested the possibility of work in a franchisee food outlet or alternatively he could get some retraining to make him more employable.
Dr Wade concluded Mr Newby still had active PTSD. He did not believe that there had been any significant change in Mr Newby’s mental health despite him having ongoing treatment with psychotropic medication and psychotherapy. However, following his interview with Mr Newby, Dr Wade changed the WorkCover certificate to take into account “trial return to work”. Dr Wade considered that rehabilitation was a trial and error process of:
“trying to find some future niche in the world and some potential employment he might be capable of but also acknowledging it is still fairly early days in that process and that also with the amount of active PTSD symptoms...”.
The doctor noted that Mr Newby had completed a TAFE course gaining qualifications for gym instructor work. The doctor stated “it was an extreme battle for him and was really done at a heroic level” and the effort put in was disproportionate to the course requirements. Dr Wade expressed reservations about Mr Newby being able to work in the area, which would require working with other people, clients and colleagues.
Despite the fact that Mr Newby was keen to get back to work, Dr Wade considered that his chances of succeeding in the shorter term were fairly poor. Mr Newby would have some form of PTSD for the rest of his life, which would require management through psychological strategy and medication and avoiding particular triggers.
Dr Wade considered each of the jobs of mining, store manager and real estate sales suggested by the ‘earning capacity assessment- section 40A’ report prepared by Dr Robin Mitchell and Mr Brown, clinical psychologist from Earning and Vocational Assessments report dated 8 July 2008, (‘the EVA report’) (see [80]-[93] below) inappropriate for Mr Newby. The mining job was unsuitable due to the physical danger of mining. It is a team-based occupation with workers needing to have good teamwork and communication with other miners for the safety of the work. Dr Wade did not believe that there had been any real improvement in Mr Newby’s ability to form new associations.
In respect store manager work, this involved handling responsibility and potential conflict and confrontation with staff and the public. This was something that Mr Newby needed to avoid and he would find it overwhelming and such work was likely to exacerbate Mr Newby’s PTSD. Dr Wade doubted Mr Newby would be able to last more than one or two days in this job without overreacting and becoming irritated and it was more likely that he avoid or disassociate from the position. The real estate sales work would have similar problems because of Mr Newby’s inability to relate to new people.
The doctor concluded that any realistic rehabilitation into the workplace would require a lot of special conditions, including Mr Newby needing to be self-employed so he could control his employment situation absolutely. Mr Newby’s treatment was focused on helping him gain more tools to handle the PTSD and to adapt to a fairly non-demanding workplace. The doctor reiterated that Mr Newby was motivated to return to gainful employment and the real and very significant obstacle was his PTSD.
Dr Wade provided a WorkCover certificate dated 13 August 2008 stating that Mr Newby was fit for suitable duties from 13 August 2008 to 13 November 2008 to trial a return to work or study/retraining. The diagnosis was PTSD and major depression.
Dr Wade prepared a report dated 26 November 2008 commenting on and responding to the Medical Assessment Certificate of Dr Steele date 13 November 2008 (see [95]-[99] below). He noted that Dr Steele’s assessment of whole person impairment was significantly less than his assessment recorded in March 2008. He conceded that Dr Steele’s assessment and rationale for his rating and the process he had gone through was reasonable and based on the history obtained he delivered a reasonable rating score. In relation to employability Dr Wade stated that he believed that Mr Newby was totally impaired
“ even though he had many theories and hypothesis of what he could do, even working independently or self employed, these were either impractical, not taking into account his real mental state or his overall behaviour, or morbid fantasies.”
Dr Wade suggested that the differences between Dr Steele’s assessment and his own may have been accounted for by the medication controlling Mr Newby’s symptoms or possibly was as a result of Mr Newby presenting more positively than his actual functioning level.
In a report dated 17 December 2008, Dr Wade recorded a mild improvement related to the increase in epilim medication and he reassessed his whole person impairment (‘WPI’) at 20%. Dr Wade believed that there was a lack of acknowledgement by Dr Steele of Dr Wade’s role as a treating clinician since 14 June 2006 and that his longitudinal assessments of Mr Newby were vastly superior to cross-sectional assessments in terms of reliability and validity.
Dr Wade believes Mr Newby was still very impaired and there was no evidence of him forming new relationships or friends or pursuing new social situations and he required significant ongoing treatment. There had been some slight improvement in terms of his ability to travel in that he was less aggressive and also that he demonstrated an ability to communicate a little bit more easily with his ex-wife over matters regarding the children. Otherwise there was no evidence of increased functional capacity. Dr Wade concluded that the opinion that Dr Steele’s assessment was deeply in error.
Mr Peters, psychologist, in a report dated 29 May 2006 stated Mr Newby had been referred to him by his doctor, colleagues and duty officer. He diagnosed PTSD and Major Depression substantially caused by his work.
In a report dated 7 August 2008, Mr Peters noted Mr Newby had also attended Dr Lamberth who was the director of psychiatric services for the Australian Defence Force in Canberra and was an expert in matters of PTSD and that he had confirmed Mr Newby’s diagnosis.
Mr Peters was of the opinion that by August 2008, Mr Newby was in remission and that his symptoms were at a minimum level as a result of therapy and medication and the fact that he had been finally medically discharged. His intervention and care of Mr Newby was in respect of relapse prevention. He also noted that Mr Newby had depression, which was episodic in nature.
Mr Peters stated that his treatment goal was to ensure that Mr Newby found dignified work, which had not been achieved to date, however he considered that the jobs identified in the EVA report were unsuitable. Real estate agent work was highly stressful, and not dissimilar to telemarketing often involving requirement to make 200 cold canvas calls per week. The mining industry involved shift work, and the mines had a high risk of critical incidents and that such work would place Mr Newby at risk psychologically. In respect of the suggestion that Mr Newby could work as a retail store manager, Mr Peters’ report is ambiguous, he appears to endorse such work as something that Mr Newby could work towards obtaining.
Mr Peters did not believe that Dr Vickery was qualified to offer any broad vocational opinion. He was critical of Dr Vickery’s suggestion that Mr Newby could work anywhere other than the police and security work.
Police Force’s evidence
The Police Force relied on two reports from Dr Vickery, psychiatrist, dated 6 March 2008 and 30 June 2008, a functional vocational report prepared by EVA dated 8 July 2008 and the WorkCover medical certificate of Dr Wade dated 13 August 2008.
Dr Vickery examined Mr Newby at the request of the insurer for the Police Force and prepared a report dated 6 March 2008. He did not believe there was any evidence of clinically significant anxiety, major depression, paranoid delusion, thought disorder or gross cognitive impairment. There were occasional flashbacks with certain triggers associated with passing the location of a traumatic scene or with people he had dealt with previously in relation to trauma. There were minimal dreams and no disassociative episodes.
Whilst Mr Newby had previously been diagnosed with PTSD, Dr Vickery did not believe he fell within the DSM IV criteria, which suggested a significant improvement in his condition as a result of his treatment and the medical discharge. He found there was no objective evidence of a work related condition on assessment. His prognosis was optimistic given there was no objective evidence of any incapacitating psychopathology. The doctor considered Mr Newby psychologically fit for employment apart from police or security duties.
In a separate report dated 30 June 2008 Dr Vickery found Mr Newby had no objective evidence of any permanent impairment or significant whole person impairment as a result of any incapacitating psychopathology.
The EVA report included an executive summary that Mr Newby was physically and psychologically fit for fulltime work including reasonable overtime. He was assessed as suitable for mining work, store manager work or real estate sales work. A police officer could currently expect to earn $1,303.00 per week or $34.28 per hour, a miner was assessed to have an hourly earning rate of $44.47, a real estate agent an hourly rate of $37.79 and a store manager an hourly rate of $20.16.
The report at paragraph 12 of page 8 under “Presentation and General Impression” noted that Mr Newby presented with a slightly flat mood and appeared lacking in “get up and go”. There was no evidence of distress, hyper-arousal or other symptoms that may be explained by trauma.
The report noted that he attends the gym and surfs occasionally. During the day he spent time at home performing housework and watching TV. He visited ex-policemen who had also left work due to stress. He transported his children to and from school and cooked dinner.
It was noted that Mr Newby had recently completed a certificate III in health and fitness instruction. He had completed a 4 ½ year apprenticeship as a fitter and turner prior to joining the Police Force, but he had no additional licences, although he held a car and motorcycle license. Apart from a brief period in sales at K-mart and six months with an engineering firm after completing his training he had always been a police officer until his medical retirement. He has not worked since. He had not undergone any workplace-based rehabilitation, but was interested in looking at small business courses. He preferred to be outdoors. He had the ability to learn new skills.
Mr Newby reported that in completing the TAFE course, he had experienced difficulty undertaking the paperwork and getting the assignments in and it was taking him longer to retain information and he was uncomfortable getting up in front of people to do practical teaching.
The report’s authors formed a different conclusion to Mr Newby’s doctors, suggesting that the PTSD diagnosis was unclear in May 2006 because it had not been shown that the diagnosis flowed from “critical incidents”. At the time of their examination Mr Newby did not mention any spontaneous memories of these events and in relation to flashbacks he only described them when he was driving past the location of a previous car accident and this was considered to be a memory from the location rather than a flashback. They noted however he was “on edge” if he failed to take his medication.
The EVA report concluded that there was no justification for considering that Mr Newby’s condition was chronic in May 2006. The authors considered “disillusioned” and “demoralised” were more relevant descriptors of his condition in May 2006 and they now described him as “directionless and somewhat demoralised”.
The authors concluded that Mr Newby was struggling in his job irrespective of his psychological status and “the compensation claim makes most sense if seen as a socially acceptable resolution of both growing performance deficit and a (partly linked) morale crisis”. They recommended that Mr Newby seek meaningful work and avoid spending time with medically retired police officers and instead seek a more positive social environments.
The report noted that Mr Newby had acquired skills as a police officer of investigation, occupational health and safety (OHS), interview techniques, driving, report writing and negotiating and dealing with difficult people. It was considered that he had a range of transferable skills including good manual and mechanical skills and knowledge, some computer skills, driving skills and experience in OHS and had qualified as health and fitness instructor.
Mr Newby lived in a western suburb of Newcastle and the labour market reasonably accessible to him was Newcastle, which was the second most populated area in the state of New South Wales. It was well serviced by roads, road based public transport systems and was also serviced by city rail lines providing local and regional commuter services. The authors considered the standard travel time for accessibility was 90 minutes and in that time Mr Newby could reach the Central Coast, all of Newcastle and the Hunter Valley. The report concluded that the work options of miner, small business owner/store manager, real estate agent and health and fitness instructor were considered suitable options. The health and fitness instructor was lower paid and for this reason was not further assessed. The report did not however detail the wages for this occupation.
Attached to the report was an advertisement from ‘Walter Mining’ seeking qualified deputy fitters and electricians and qualified and experienced underground coal miners,
The second job suggested was store manager with a fulltime weekly wage of $766.00 per week based on an hourly rate of $20.16. Attached to the report was a job advertisement for a store manager of the Mayfield Radio Rentals store. The job requirements were for a “dedicated, positive individual…committed to maintaining excellent operational standards and a high levels of measured customer service”. There was a requirement for management, credit control and collection experience, sound knowledge of sales and marketing techniques. and “outstanding communication skills”.
Mr Newby apparently suggested real estate as a field of work he believed he could do. The authors of the report did not believe there was anything in his psychological status that would suggest he was not suited to this work. The report noted that he has no qualifications in the area but since he recently completed a TAFE course “he should have no difficulty with a substantially easier real estate course.” The authors nominated real estate sales work as appropriate and estimated the hourly rate in this work at $37.79. They conceded that the employment outlook was unstable, rising and falling with the changes in sales.
The actual job advertisement for a real estate agent annexed to the EVA report. A preference was expressed for applicants with successful real estate or business experience, a willingness to adapt and learn new concepts, a successful history in prospecting new business and a current certificate of registration/licence.
The respondent also sought, and was granted leave to rely on the Medical Assessment Certificate prepared by Dr Steele in matter number 7127/08.
Dr Steele recorded that Mr Newby continued to have depressed moods and tearfulness. He had poor sleep and insomnia, impaired libido, fluctuations in motivation and he tended to procrastinate and had variable difficulties with his concentration. In respect of employability the doctor noted Mr Newby did not believe he could return to work as a police officer or police related activities but he believed that he could perhaps cater or run a coffee shop in a self-employed capacity.
Dr Steele was the opinion that at the time of his examination the PTSD had largely resolved and was sub-clinical. This was because he had been removed from the ongoing stresses of frontline policing but Mr Newby had a partially treated major depressive illness, which needed further and ongoing treatment.
Dr Steele assessed Mr Newby as having a 6 %WPI as a result of his psychological injury. The doctor reviewed Dr Wade’s report dated 27 March 2008 and Dr Vickery’s report dated 6 March 2008 and concluded overall that he disagreed with Dr Vickery’s opinion that there was no psychiatric diagnosis, but agreed with him that the whole person impairment was not to the level as described or calculated by Dr Wade. Dr Steele believed that Dr Wade had made a mistake in the apportionment of the effect of treatment in his assessment.
Dr Steele’s MAC was the subject of an appeal to a Medical Appeal Panel (‘MAP’) under section 327 of the 1998 Act. The MAP issued a decision on 16 April 2009 and corrected an error in the calculation of the WPI but did not otherwise interfere with Dr Steels’ opinion and diagnosis, which issued a decision
Given the MAP decision issued after the Arbitrator’s decision, on 19 June 2009 I issued a direction to the parties seeking submissions on whether they objected to my having regard to the MAP decision in the determination of the appeal. Both parties responded confirming neither had any objection.
ARBITRATOR’S REASONS
The Arbitrator rejected the reports of Drs Vickery and Wade “as both appear to me to be partisan and lack objectivity.” (Reasons [13]).
The Arbitrator referred to Dr Steele, who “seems to accept the Applicant’s view of his own limitations and suggested alternative fields of employment (catering/coffee shop in a self employed capacity). (Reasons [17]).
The Arbitrator considered and rejected the “suitable employment” options (store manager, real estate agent and miner) identified in the EVA report as unrealistic due to Mr Newby’s psychological condition and his lack of relevant experience. (Reasons [19]-[24]).
The Arbitrator accepted that employment in the nature of a manager/operator of ‘Jim’s Mowing’ for 38 hours per week was suitable employment, given the worker’s difficulties day to day as referred to by the worker in his statement dated 29 August 2008 and the “findings and PIRS rating set out by Dr Steele in his Medical Assessment Certificate dated 13 November 2008” (Reasons [26]).
He accepted the Police Force’s submission that it was 12 months since Mr Newby was medically retired and the medical reports showed an improvement in his PTSD and Major Depression (Reasons [27]).
The Arbitrator stated at [28]:
“It seemed to me that after the conclusion of the present proceedings, hopefully the Applicant, no longer having to recount his history and problems to an ever increasing number of lawyers and medical practitioners, may gain further improvement with his psychiatric symptoms and feel sufficiently confident to obtain fulltime employment… it would appear to me in the long term he has very good prospects of returning to full time employment using his previous training as a fitter and turner, or alternatively as a fitness instructor and possibly other forms of employment that may be equally as remunerative as was as [sic] his career in the Police Force.” (emphasis added)
However, in making the award of weekly compensation in favour of Mr Newby, pursuant to section 56, the Arbitrator made the award conditional upon Mr Newby providing his former employer with medical certificates in respect of his incapacity every month. (Reasons [29]).
The Arbitrator rejected, as too low, Mr Newby’s counsel’s submission that Mr Newby’s ability to earn in suitable employment, such as Jims Mowing was $700.00. He found instead that Mr Newby could earn $760.00 per week ($20.00 per hour, 38 hours per week). (Reasons [30]).
Having made this finding, the Arbitrator completed the mathematical calculation, as set out in Mitchell and entered an award of $682.00 per week.
ISSUES IN DISPUTE ON APPEAL
The issues in dispute are whether the Arbitrator erred:
(1) in concluding that Mr Newby is able to earn $20.00 per hour for a 38 hour week in employment of the kind undertaken by “Jim’s Mowing” either by way of employment or self employment;
(2) in providing no evidentiary basis for his calculation of weekly compensation under section 40(2) of the 1987 Act;
(3) in failing to give sufficient reasons for his determination under section 40 of the 1987 Act, and
(4) in the weight he attached to Mr Newby’s statement in the assessment under section 40 and in applying the test in Mitchell.
Submissions on Appeal
Police Force
The Police Force accept the Arbitrator’s finding that Mr Newby could engage in some self employment such as Jim’s Mowing but submit that the calculation of his ability to earn is “significantly higher” than found by the Arbitrator.
Paragraph [30] of the Arbitrator’s Reasons reads:
“It is not entirely clear to me whether the proposed employment with Jim’s Mowing would be by way of employment or self employment and it would seem to me that the sum suggested by his Counsel is a little on the low side and I would believe a figure of $760.00 per week ($20 per hour for a 38 hour week) is probably a more appropriate measure of the amount that the Applicant is presently able to earn in suitable employment.”
The Arbitrator’s conclusions at paragraph [30] of his Reasons amount to an error of fact leading to an erroneous application of section 40 of the 1987 Act. He provided no factual or other evidence for concluding an ability to earn at $760.00 per week or that such employment attracts an hourly rate of $20.00 for a full week of work.
The Police Force accepts that the Commission is a specialist tribunal and there is judicial support that “Arbitrators contain [sic] experience and knowledge of labour markets and wage levels.” However, evidence as to “probable weekly earnings” [sic-ability to earn] must be logical and probative and not based on speculation or unsubstantiated assumptions (Rule 15 Workers Compensation Commission Rules 2006; Makita (Australia) Pty Limited v Sprowles [2001] NSWCA 305 (‘Makita’) per Heydon JA at 85; South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 (‘Edmonds’) per McColl JA at [127]-[131]; Round the Clock Transport Services Pty Ltd v Flynn [2007] NSWWCCPD 204 (‘Flynn’)).
The Arbitrator’s conclusions were based on mere speculation and unsubstantiated assumptions and the calculation of Mr Newby’s ability to earn was not logical or probative.
The Arbitrator failed to provide adequate reasons in support of his determination (see ING Administration Pty Limited v Singh [2008] NSWWCCPD 48 at [96]), including relevant finding on material questions of fact, applicable law and the application of the law to the facts as found.
The Arbitrator provided no reasons for concluding that employment in the nature of Jim’s Mowing would enable Mr Newby to earn $760.00 per week or that the hourly rate for such work was $20.00.
The Arbitrator erred in the application of section 40 of the 1987 Act and the second step of the test in Mitchell. The evidence of the expert functional and vocational assessment (EVA report) was logical and probative. It was not open to the Arbitrator to reject it and prefer the unsubstantiated and speculative assertions by the worker.
The Arbitrator erred in finding that employment was unsuitable on the basis that the worker was required to undergo, and would fail, a medical assessment. The Arbitrator merely assumed that the worker would be required to submit to medical assessment.
The Police Force relies on the following passage from Dixon CJ in Jones v Dunkel (1959) 101 CLR 298, which was approved in West v Government Insurance Office of New South Wales (1981) 148 CLR 62 at 66:
“The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied”.
The party that asserts a particular fact must prove it by direct evidence or by circumstantial evidence, which together is sufficient to support an inference to that end (see Seltsam v McGuiness (2000) 49 NSWLR 262). The evidence before the Arbitrator was not sufficient to have reasonably satisfied him that the worker could not engage in some employment in the mining industry.
The relief sought by the Police Force is that the Arbitrator’s decision is revoked and an award entered in favour of the Police Force, or alternatively the section 40 assessment re-determined taking into account the evidence of Mr Maunder.
Mr Newby
It is clear from the Arbitrator’s decision that he understood the worker’s case was that he was fit and had a capacity to perform work such as lawn mowing. The reference to “Jim’s Mowing” in counsel’s submission was simply a reference to the type of endeavour used by people to undertake employment in lawn mowing.
If the Appellant’s submission is that the Arbitrator had not relied upon proper factual or other evidence for his conclusions, this is erroneous. The Arbitrator’s decisions disclosed that he had regard to “all the available medical evidence” (Drs Steele, Vickery and Wade) and the “capacity evidence” in the EVA report.
The Arbitrator accepted the views of Dr Steele and discounted the views of Drs Vickery and Wade. Dr Steele’s report was admitted into evidence on the application of the Police Force and the Arbitrator accepted the findings of Dr Steele as to alternative employment (Reasons at [17]).
The Arbitrator considered the various propositions raised by the Appellant’s EVA report. He took into account the various earnings and came to a conclusion that $20.00 per hour was an appropriate rate of remuneration. The Arbitrator was entitled to bring to the proceedings his knowledge of rates of pay and particularly having regard to the income detailed in the Appellant’s own expert report.
The Appellant misconceived the relationship between the finding of the Arbitrator with respect to “Jim’s Mowing” and the calculation pursuant to section 40.
The Arbitrator properly evaluated the income that Mr Newby would be able to earn in suitable employment and found:
1. suitable employment was the type of work required as in lawn mowing or such other manual work;
2. it is a relatively low paid employment, and
3. he had available to him wages and hourly rates applicable to other types of employment which were of greater skill but unsuitable to Mr Newby.
In analysing the decision against the EVA report it is clear that he equated the earnings from lawn mowing with wages similar to that of a store manager (page 21 of the EVA report). Therefore the finding was not based on speculation or unsubstantiated assumption.
Whilst the Appellant submits that the Arbitrator’s calculation at step two of the Mitchell test was incorrect, it does not explain how it was incorrect other than to seek to introduce new evidence from Mr Maunder. Mr Maunder’s evidence of franchisee turnover is not evidence capable of satisfying the second step of the section 40 calculation.
The Arbitrator engaged in a “proper reasoning process as to the matte in dispute and the evidence related thereto”. (Notice of Opposition to Appeal, submission 2.6, ground3)
The only issue between the parties concerned the assessment of his ability to earn under section 40(2)(b). The Arbitrator, “with deliberation, went through each part of the evidence” from both parties and gave reasons as to why employment as a lawn mowing person would enable Mr Newby to earn $760.00 per week based on a 38-hour week.
The Arbitrator gave proper reasons for rejecting coal mining as being suitable employment. He relied on the EVA report and “his own experience and understanding of the medical evidence”. He rejected mining employment as suitable for the following reasons:
1. the requirement to undertake a medical examination as a prerequisite for employment in the mining industry as evidenced at page 20 of the EVA report (Reasons at [19]);
2. the worker’s inexperience would preclude him from gaining employment in the current economic downturn, and
3. this was supported by the EVA report (page 20) where it noted the requirement that miners must have at least twelve months experience in underground coal mining and the poor employment outlook (page 19 of the EVA report).
The Arbitrator did not rely solely on the EVA report, at Reasons [26] and [27] the Arbitrator considered the day-to-day effect on Mr Newby of his injury and in so doing accepted the findings of Dr Steele as to their effect.
It was incorrect to suggest that the Arbitrator was not adequately informed to enable him to draw proper inferences and accept the evidence that was available to him.
DISCUSSION AND FINDINGS
The issue for determination by the Arbitrator was the extent of Mr Newby’s level of incapacity and the quantification, if any of the reduction in the worker’s earnings pursuant to section 40.
Whilst the Police Force accepts the Arbitrator’s finding that Mr Newby was not fit for his pre-injury work was a police office but was fit for full time work (38 hours per week) in self employed work such as Jim’s Mowing, it challenges the Arbitrator’s assessment that Mr Newby’s ability to earn in suitable employment is $20.00 per hour or $760.00 per week.
The Police Force’s submission in relation to the assertion that the Arbitrator fell into error in failing to assess Mr Newby’s ability to earn at $1287.30 per week depends upon the acceptance of the evidence of Mr Maunder. For the reasons I have already given, I have declined to permit the tender of Mr Maunder’s evidence on appeal. Having refused to admit Mr Maunder’s statement into evidence on this appeal, the Appellant’s submissions relying on that evidence cannot be sustained. The grounds of appeal and submissions on the evidence as before the Arbitrator remain the subject of this appeal.
Given that Mr Newby was not working, the Arbitrator’s task was to assess his ability to earn in suitable employment under section 40(2)(b) of the 1987 Act. One of the most useful passages regarding the nature of this enquiry is in the judgment of Burke J in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175:
“When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work – availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn…
When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.”
This passage was expressly adopted by Handley JA in the Court of Appeal in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175. Handley JA in that case noted that ‘suitable employment’ was to be ascertained by reference to the definition in section 43A.
In accordance with section 40(3), the determination of the amount that an injured worker would be able to earn in suitable employment is subject to the following:
“(a) the determination is to be based on the worker’s ability to earn in the labour market reasonably accessible to the worker;
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.”
Section 43A identifies various factors that must be taken into account in determining “suitable employment”.
As members of a specialist tribunal, the judges of the Compensation Court were held to be qualified as a result of their experience and knowledge of the labour market and wage levels to make assessments, often in the absence of any detailed evidence, of the value of described work within the labour market. (J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625; [1972] ALR 331; (1972) 46 ALJR 152 at CLR 632-633). See also Akawa Australia Pty Ltd v Cassells (2003) 25 NSWCCR 385 at 392 and ICI Australia Operations Pty Limited v WorkCover Authority of New South Wales [2004] NSWCA 55 (‘ICI’); (2004) 60 NSWLR 18 at [219] - [232]).
In Office of the Director of Prosecutions v Olsen [2009] NSWWCCPD 26 Deputy President Roche considered the circumstances in which a specialised tribunal such as this Commission may use its general knowledge of conditions of employment and rates of pay as that used by the former Compensation Court. Referring in particular to ICI he noted at [27]:
“…McColl JA (Mason P and Meagher JA agreeing) undertook (at [219] to [223]) a detailed review of the authorities dealing with the circumstances in which a member of a specialised tribunal, such as the current Commission, might rely upon knowledge acquired as a member of that tribunal. In particular, her Honour referred to Bryer v Metropolitan Water Sewerage & Drainage Board (1939) 39 SR (NSW) 321 (‘Bryer’) where Jordan CJ (with whom Halse Rogers and Bavin JJ concurred) held (at 330) that the Workers’ Compensation Commission (established in 1926) was entitled to use general knowledge acquired in “investigating ... thousands of cases in which evidence is given as to conditions of employment and rates of pay” “not only for the purpose of supplying gaps in the evidence given before it as to matters which it is required by statute to determine ... but also for the purpose of weighing and testing any evidence that may actually be tendered.” Her Honour also observed (at [222]) that in Nelson Barwick CJ and Gibbs J expressly approved Jordan CJ’s conclusion in Bryer concerning the Workers Compensation Commission’s ability to draw on its general knowledge and experience.”
Deputy President Roche went on to observe at [28]:
“The current Commission is also a specialized tribunal that has the same power to use its general knowledge of conditions of employment and rates of pay as that used by the Compensation Court or the previous Commission before it. The current Commission has even greater flexibility in its proceedings in that it is not bound by the rules of evidence and may inform itself on any matter (section 354(2) of the 1998 Act). In addition, the current Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (section 345(3) of the 1998 Act).” (emphasis added).
A decision maker must, however, disclose the essential steps in the reasoning process, leading to the figure that is assessed to represent probable earnings. It is impermissible to merely assess a figure without demonstrating how it was arrived at (see Mitchell).
In Mitchell, the Court of Appeal observed, in respect of the Compensation Court, that this obligation to disclose the reasoning steps may be greater when the Court was using its general knowledge and experience:
“However, the capacity to proceed informally as regards proof of evidence does not relieve the Court of the duty to disclose its essential reasoning process. Indeed, that duty may be heightened where the court dips into its general store of knowledge rather than proceeds upon the evidence tendered.” (page 533 [F])
In the exercise of their determinative powers, Arbitrators have a statutory obligation to provide adequate reasons for their decisions (section 294(2) of the 1998 Act; Part 15 Rule 15.6 of the Workers Compensation Commission Rules 2006 (‘the Rules’); Absolon v NSW TAFE [1999] NSWCA 311). A failure to provide adequate reasons constitutes an error of law and may be a ground to set aside the Arbitrator’s decision.
Part 15, Rule 15.6 of the Rules reads:
“15.6 Certificates of determination
A statement of the Commission’s reasons referred to in section 294 (2) of the 1998 Act is to include:
(a)the Commission’s findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b)the Commission’s understanding of the applicable law, and
(c)the reasoning processes that lead the Commission to the conclusions it made.
Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.” (emphasis added).
To succeed in having the Arbitrator’s decision set aside on this ground, the Police Force must demonstrate not only that the reasons are inadequate, but that their inadequacy discloses that the Arbitrator failed to exercise his statutory duty to fairly and lawfully to determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247). Reasons must set out the judge’s (Arbitrator’s) reasoning process and merely incorporating counsel’s submissions is not appropriate (Sourlos v Luv a Coffee Lismore Pty limited & anor [2007] NSWCA 203 at [30]).
The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). It is not necessary for an Arbitrator to refer to every piece of evidence (Yates Property Corporation Pty Limited (in Liq) v Darling Harbour Authority (1991) 24 NSWLR 156; Ainger v Coffs Harbour City Council [2005] NSWCA 424).
When considering the adequacy of the reasons the decision must be read as a whole (Beale v GIO (NSW) (1997) 48 NSWLR 430 at 443-444 (‘Beale’)). A Presidential member on review is not required to comb through the Arbitrator’s findings and reasons in search of error (Minister for Immigration and Multicultural Affairs v Wu Shu Liang [1996] HCA 6; (1996) 185 CLR 259). In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (‘Soulemezis’) McHugh JA (as he then was) stated at 280:
“If an obligation to give reasons for a decision exists its discharge does not require lengthy or elaborate reasons: Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5: 63 WN 34 at 36.”
Contrary to Mr Newby’s submission that the Arbitrator had regard to “all of the available medical evidence” (see [123] above) and that he “with deliberation, went through each part of the evidence” from both parties and gave reasons as to why employment as a lawn mowing person would enable Mr Newby to earn $760.00 per week based on a 38-hour week, I am not satisfied, for the reasons set out below, that that is the case.
As referred to above at [51] to [75], there was a significant body of medical evidence before the Arbitrator. In his Reasons, however, he referred only in passing to the reports of Drs Vickery and Wade. The Arbitrator made no reference at all to the reports of Dr Lambeth, Mr Peters or the HealthQuest report from Mr Milic.
The Arbitrator’s reasons do not disclose that he considered the labour market reasonably accessible to the worker, or that he considered each of the factors in section 43A(1). Further, whilst it may be inferred, it is not clear from the Arbitrator’s reasons, whether he was relying on his knowledge as a member of a specialist tribunal when he assessed the worker’s ability to earn at $20.00 per hour and $760.00 per week, nor did he explain the reasoning process he undertook to arrive at that rate of pay. The only reasons he gave were that he considered the earnings of $700.00 per week submitted by Mr Newby’s counsel for such work was “a little on the low side” and $760.00 was a more appropriated figure.
I accept the Appellant’s submission that the Arbitrator’s reasons do not disclose the reasoning process leading to the conclusions he reached. Further, on review, I find that the inadequacy of the reasons discloses that the Arbitrator failed to exercise his statutory duty to fairly and lawfully to determine the application and for these reasons the Arbitrator’s decision cannot stand and must be revoked.
Having upheld the appeal and revoked the Arbitrator’s decisions, it is desirable where appropriate that a Presidential member finally determine the matter (see Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344). I have however determined that the matter cannot be finally decided and should be remitted to another arbitrator, however I make the following findings.
Ability to earn in suitable employment
Mr Newby was medically retired from the Police Force and the evidence overwhelmingly supports a finding that he is permanently unfit for work as a police officer or any other work such as security work which would have the potential to expose him to crucial incidents, a situation likely to exacerbate his condition or cause relapse. (see HealthQuest report dated 27 June 2007 at [52] , Dr Wade report dated 8 January 2008 at [54], Dr Lambeth report dated 14 June 2006 at [51] and Dr Vickery report dated 6 March 2008 at [77]). Indeed, counsel for the Police Force conceded that Mr Newby’s incapacity for police or security work was “quite understandable” (T16.14). I therefore find that as a result of the nature and conditions of employment as a police officer he suffered injury in the form of PTSD and Major Depression, and Mr Newby is incapacitated for his pre-injury work as a police officer.
Mr Newby has not been in employment since going off work in May 2006.
Dr Wade who has been Mr Newby’s treating psychiatrist since June 2006 prepared six reports, which were in evidence. He provided a comprehensive description of Mr Newby’s presentation and symptoms. Dr Wade presented as a conscientious and caring specialist, who has been supportive of and provided treatment to Mr Newby including the prescription of psychotropic medication and psychotherapy over that time. I therefore find his evidence credible and persuasive.
Whilst Dr Vickery accepts that Mr Newby may have suffered from PTSD, he found no clinical evidence of the condition at the time of his examination. Whether or not Dr Vickery had access to Mr Newby’s statement of evidence is not clear. Certainly there is no reference to it in his report. The history he relied on was inaccurate and incomplete. In particular there was no reference to the history of Mr Newby’s nature and conditions of employment and the many traumas to which he was exposed. I am not satisfied that the report provided a fair climate for the acceptance of his opinion. Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58; 59 ALJR 844.
His opinion as to diagnosis was inconsistent with Drs Wade, Steele and Lambeth and the clinical psychologists Mr Milic and Mr Peters. In addition, his reasons concluding that Mr Newby was not suffering any psychological condition were unexplained and as a result, are of little probative value.
Dr Steele, like Mr Peters, was of the view that the PTSD was at a sub-clinical level but he required further treatment for the depression. The doctor noted that Mr Newby suggested that he might be fit to run a coffee shop in a self-employed capacity.
Based on a review of all the available evidence I find that Mr Newby is fit for low-stress work, preferably in a self employed capacity in trade or manual work in environments where Mr Newby is in control and not answerable to a boss and not dealing with the public. He is not fit for work that exposes him or others to trauma or the risk of trauma or serious problems or situations requiring a duty of care for the welfare of others including police, security, or ambulance work. He had difficulties forming new social relations and was not fit for work where there was potential for confrontation.
These limitations on Mr Newby’s fitness for employment and the types of work that are suitable for him are clearly at odds with the conclusions reached by the authors of the EVA report and the jobs identified in that report as suitable for Mr Newby.
In contrast to the overwhelming evidence that Mr Newby suffered severe PTSD and Major Depression, such as to necessitate medical retirement from the Police Force and ongoing psychotherapy and psychotropic medication, the authors of the EVA report considered that in May 2006, he was merely “disillusioned” and “demoralised” and in 2008 he was only “directionless’ and “demoralised” (see [86] above). This erroneous assumption and conclusion in relation to the nature and extent of Mr Newby’s psychological status and diagnosis informed the conclusions reached and the identification of jobs (real estate, mining and store manager positions) the authors found as being suitable employment options for Mr Newby. For these reasons and the reasons given below, I therefore find that the EVA report, of very limited evidentiary value given that all conclusions are based on this erroneous assessment.
The use of rehabilitation reports that include ‘section 40 assessments’, in this case the EVA report designed to assess a worker’s ability to earn was discussed by Campbell JA in Ric Developments trading as Lane Cove Poolmark v Muir [2008] NSWCA 155 at [48]:
“The error that the Deputy President saw in the Arbitrator’s reasoning was that the Arbitrator had not paid attention to the practical realities of the Worker, in his injured condition, actually being able to get and keep a job. The VCC reports did not address the Worker’s practical prospects in the labour market. Rather, they assessed his physical and mental capacities, and matched them to the tasks required to be performed in various jobs. That the Worker had the physical and mental capacity to carry out the tasks involved in some particular job is not sufficient to establish that there was a realistic prospect that anyone would actually give him such a job, or that he would be able to keep it. A further enquiry was needed concerning those matters, and it was that further enquiry that, in the Deputy President’s view, the Arbitrator had failed to carry out.” (emphasis added).
An analysis of the jobs identified in the EVA report as suitable employment not only fail to establish that Mr Newby had a realistic prospect of obtaining and maintaining these particular jobs, but the evidence establishes that the report failed the more fundamental task referred to by Campbell JA above, that of assessing Mr Newby’s physical and mental capacities, and matching them to the tasks required to be performed in various jobs. Each of the jobs identified is totally unsuitable for Mr Newby for various reasons as summarised below.
In so far as work as a real estate agent is concerned the Arbitrator noted the concession by counsel for the Police Force that such a submission might be “a bit of a long bow” (T15.7). Mr Newby has no experience in sales and has never worked as a real estate agent. The work would involve marketing skill, and a high level of stress and public engagement.
The advertisement for the store manager position annexed to the EVA report required experience and skills Mr Newby does not possess and as cautioned by Dr Wade, whose evidence I accept, Mr Newby would last only a matter of days in such a role, before he over reacted and came into conflict with other staff or members of the public.
The Appellant submitted that the Arbitrator was in error in assuming that Mr Newby would be required to submit to a medical examination before he could take up work as a miner. This submission is misconceived given the job advertisement by Walter Mining (see [90] above), annexed to the EVA report, specifically required a medical clearance as prerequisite to employment as a miner. Again Mr Newby possessed no experience or qualifications for these jobs and the potential danger in underground mining was completely unsuitable for him.
Taking into account the matters identified in section 43A, I make the following findings:
(a) The nature of the worker’s incapacity and pre-injury employment
Mr Newby is unfit to work in his pre-injury employment as a police officer.
He is not fit for any similarly stressful work or work that exposes him or others to danger or risk including security work, ambulance work, work in hotels or bottle shops, teaching or the armed forces. He has difficulty forming new social relations, would find it difficult being accountable to a boss or being required to work in a team environment.
(b) The worker’s age, education, skills and work experience.
Mr Newby is 41 years of age. He left school after completing year 10 and then completed a 4½ year apprenticeship as a fitter and turner. He has been employed as a police officer for 20 years but has not been in any employment since 2006. He believes, and I agree, that without retaining he is effectively unqualified to resume his trade. Whilst he has some transferable skills from the police force including experience in OHS, report writing, computer skills, dealing with the public and supervising more junior staff and being supervised himself, his psychological condition makes him unsuitable for many jobs in which he might use these skills.
(c) The worker’s place of residence
Mr Newby currently resides in a western suburb of Newcastle.
(d) The details given in the medical certificate supplied by the worker.
Mr Newby is unfit for Policing work or associated security work. He is fit for physical low-stress work provided he does not have to confront stressful situations or be responsible for the welfare of others.
(e) The provisions of any injury management plan for the worker.
There is no evidence of any current injury management plan in place for Mr Newby.
(f) Any suitable employment for which the worker has received rehabilitation training.
There is no evidence that Mr Newby has received rehabilitation training. He has however recently completed a TAFE certificate course in health and fitness.
(g) The length of time the worker has been seeking suitable employment.
Mr Newby has not worked since mid 2006. In late August 2008, the medical and psychology reports shifted to a focus on re-employment.
(h) Any other relevant circumstances.
No other relevant circumstances have been referred to in the body of this decision.
On appeal both parties agree with and accept the Arbitrator’s finding that Mr Newby is fit to work 38 hour per week self employed mowing lawns such as for Jim’s Mowing.
Having regard to his age, education, working experience, the work for which Mr Newby would be suited, in the reasonably accessible labour market, and with the particular restrictions imposed by his psychological condition, is limited.
Mr Newby is fit and suited to operating his own lawn mowing business as a sole trader. I also find that he would be fit for labouring positions in parks and gardens, provided he could principally work independently. He has also expressed an interest in operating a coffee shop or food outlet. Such an endeavour may be suitable but is a less realistic prospect, given the need for a significant capital expenditure to be self employed in such work. Mr Newby has already, or could quickly acquire the skills necessary for lawn mowing work. Further, I note that he currently undertakes his own domestic gardening activities.
Having conducted a review on the merits (per Spigelman CJ in Chemler at [28]), I have reached the following conclusions. First, Mr Newby is unfit for active policing work or associated security work. Second, provided he is not placed in stressful situations or conditions that require any substantial level of accountability Mr Newby is fit to undertake physical work.
Unfortunately, despite identifying this suitable employment option, Mr Newby did not lead any evidence as to earnings in such employment. Counsel for Mr Newby submitted that the earnings in this work would be in the vicinity of $700.00 in lawn mowing or labouring work. No evidence was lead or relied on by the worker to support this submission. I have found that very little if any weight can be place on the EVA report for the reasons already given. Therefore it is most unfortunate that neither party has adduced any evidence upon which to assess what Mr Newby could earn in the suitable employment.
Although I suspect that the Arbitrator’s assessment of Mr Newby’s ability to earn at $20.00 per hour is appropriate, I am in the invidious position of having insufficient evidence on review to confirm that finding.
Whilst it is regrettable, the deficiencies in the evidence necessitate that this matter be remitted for re-determination of Mr Newby’s ability to earn in suitable employment, in accordance with the reasons in this decision. At the rehearing both parties should be given the opportunity to adduce further evidence.
OTHER
Although the Arbitrator’s decision has been revoked, I observe that the award entered was made conditional upon compliance with section 56 which requires Mr Newby continue to supply medical certificates. Given the duration of the worker’s incapacity to date and the fact that he remains under specialist care and continues to be medicated for his condition, it does not appear that such a condition is necessary or appropriate.
DECISION
For the reasons given in this decision, the Arbitrator’s determination of 24 February 2009 is revoked and the matter remitted to a new arbitrator for determination of the worker’s ability to earn in suitable employment, in accordance with the reasons given in this decision.
COSTS
The costs of the first arbitration and the second arbitration are to follow the orders made in the second arbitration.
Each party is to pay his or its own costs of the appeal.
His Hon. Judge G Keating
President
7 July 2009
I, MELANIE CURTIN CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HON. JUDGE KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
36
30
0